The Trump management introduced on July 21, 2026, that it’s withholding US$867 million in federal healthcare investment for California and $200 million for Minnesota – a complete of greater than $1 billion.
Federal officers mentioned the 2 states had failed to supply enough proof that a variety of disputed clinical claims had been legit. Those come with expenses for in-home care and different products and services coated by way of the 2 states’ Medicaid methods for low-income citizens.
Medicaid directors say the budget will also be recovered if the states provide the asked documentation. However the motion is extremely atypical: Generally, Medicaid officers spouse with states to behavior an audit once they suspect fraud, a cautious procedure that frequently takes years.
It’s the second one time in 2026 that the Trump management has withheld or deferred federal Medicaid budget for a number of states, together with California and Minnesota, on account of alleged fraud and abuse. The Democratic governors of the ones states have known as the verdict a politically motivated assault on their constituents.
I’m a historian of social coverage who led the primary complete ancient evaluate of Medi-Cal, California’s statewide Medicaid device. I’ve discovered that U.S. leaders have lengthy used the language of fraud and abuse to blur the road between correcting very actual screw ups inside of Medicaid and – as I consider the Trump management is lately doing – discrediting and defunding this system itself.
Who can pay when Medicaid is minimize? It impacts youngsters’s well being care, nursing domestic care, incapacity products and services and medical insurance.
Slashing the security web
The Medicaid restrictions are a part of the Trump management’s general efforts to slash federal investment for the security web.
The massive tax-and-spending invoice that Trump signed into regulation in July 2025 because the cornerstone of his second-term time table pared eligibility for Medicaid by way of introducing paintings necessities for some adults. It’s chopping with reference to $1 trillion in federal spending at the program over the following decade.
Researchers estimate that virtually 12 million folks, on most sensible of the estimated 28 million with out medical insurance in 2025, may just grow to be uninsured by way of 2034 because of those adjustments. By means of mid-2026, greater than 3 million folks had already misplaced their insurance policy because of Republican adjustments to the Inexpensive Care Act.
‘Padlocking’ the ‘cookie jar’
In February 2026, Vice President JD Vance, Well being Secretary Robert F. Kennedy Jr. and Dr. Mehmet Ounces, the administrator of the Facilities for Medicare & Medicaid Products and services, or CMS, introduced a brand new anti-fraud initiative known as Complete Laws to Discover Suspicious Healthcare.
Additionally recognized by way of its quite unsubtle acronym, CRUSH, this initiative is taking exceptional steps to withhold and defer budget in keeping with suspected fraud. “CMS is done trying to catch fraudsters with their hands in the cookie jar,” Ounces mentioned in saying CRUSH’s formation. “Instead, we’re padlocking the jar and letting them starve.”
To make certain, Medicaid fraud, waste and abuse – corresponding to suppliers billing Medicaid for products and services which are useless or by no means rendered – are very actual issues that price taxpayers billions of greenbacks yearly. They do divert budget from the low-income and disabled American citizens enrolled in this system.
However the Trump management’s newest strikes are a part of a much wider historical past of weaponizing Medicaid fraud and abuse – each actual and imagined. I see them as a politicized try to turn out that Medicaid itself is wasteful, that state governments can’t be relied on to manage federal cash, and that public advantages inevitably invite dishonesty.
Secretary of Well being and Human Products and services Robert F. Kennedy Jr. speaks about alleged Medicaid fraud and costs in Minneapolis in Might 2026.
Christopher Juhn/Anadolu by way of Getty Pictures
Offering little oversight at first
Medicaid was once established, in conjunction with Medicare for older adults, in 1965 as a part of President Lyndon B. Johnson’s “Great Society” reforms. In spite of offering thousands and thousands of American citizens with medical insurance protection for the primary time, those methods had few centralized mechanisms for the type of federal oversight that would save you and catch fraud and abuse.
And the sheer scale and complexity of the Medicaid device – joint federal-state investment, various eligibility necessities, thousands and thousands of enrollees and 1000’s of suppliers – created alternatives for questionable billing practices amongst suppliers.
The Nineteen Seventies noticed a variety of extremely publicized Medicaid scandals involving nursing houses, laboratories, pharmacies and so-called “Medicaid mills” – healthcare suppliers that sought to invoice the federal government for massive numbers of Medicaid sufferers for shoddy and frequently fraudulent care.
A chain of high-profile congressional investigations spurred call for for more potent Medicaid oversight and enforcement. That ended in the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977, which established the nationwide Medicaid Fraud Keep watch over Gadgets program.
The state-run Medicaid Fraud Keep watch over Gadgets won beneficiant federal matching budget to analyze and prosecute fraud.
Probably the most critical Medicaid fraud was once most often dedicated by way of healthcare suppliers and contractors, no longer sufferers. Medicaid Fraud Keep watch over Gadgets had been basically answerable for investigating suppliers, whilst additionally prosecuting the abuse and forget of sufferers whose care was once billed to Medicaid.
On the identical time, then again, Medicaid was once turning into entangled in a broader political debate over social spending, whether or not many American citizens had been turning into too depending on govt advantages, and the alleged use of advantages by way of individuals who will have to no longer have won them. Within the Nineteen Eighties and Nineties, broadly circulated tales about Medicaid uncovered fraud and malfeasance by way of suppliers.
However disproportionately, in addition they highlighted the relatively few cases of fraud by way of folks enrolled in this system, corresponding to circumstances the place they submitted false receipts for coated medically comparable trip or bought medication they got thru Medicaid free of charge or at low price.
The use of Medicare fraud to justify spending cuts
The honour between Medicaid and money help methods, such because the Support to Households with Dependent Kids “welfare” program, continuously disappeared in political rhetoric. False or exaggerated tales that portrayed African American unmarried moms dwelling extravagantly whilst fraudulently claiming welfare advantages was potent symbols of meant govt failure.
Whilst campaigning as a presidential candidate, Ronald Reagan seized in this trope of the “welfare queen” in his assaults on social spending.
Folks line up on the Baltimore Town Welfare Place of job in 1975, years sooner than considerations about social spending led to important cuts to protection web methods.
O’Halloran/Library of Congress by way of Getty Pictures
By means of the mid-Nineties, opposition to welfare methods had grow to be increasingly more bipartisan. Politicians in each events frequently used stories of Medicaid fraud at the a part of suppliers and recipients to justify tighter eligibility regulations and spending cuts.
Federal oversight expanded additional with the Deficit Relief Act of 2005, which created the Medicaid Integrity Program and reinforced federal oversight of state methods. The Inexpensive Care Act, the landmark healthcare law Congress handed in 2010, added new measures to display suppliers and examine billing.
Considerations about Medicaid’s “integrity” was extremely politicized within the debates surrounding the ACA. Critics of Medicaid enlargement argued that expanding the quantity of people that may just get medical insurance thru this system would building up fraud and incorrect enrollment. Supporters of increasing Medicaid to assist extra American citizens acquire medical insurance maintained that anti-fraud rhetoric frequently disguised ideological opposition to this system’s enlargement.
Blurring distinctions then and now
For the six a long time that this program has helped thousands and thousands of low-income American citizens get healthcare, politicians have blurred the consideration between protective Medicaid from abuse and the usage of abuse to discredit Medicaid itself.
For my part, the Trump management’s campaigns towards California and Minnesota proceed that development. It’s the usage of actual weaknesses inside of Medicaid to advance a lot broader political arguments: that Democratic states can’t be relied on, that public advantages naturally invite abuse, and that withholding budget is itself a type of reform.
The outcome will surely be that fewer low-income American citizens will be capable to get the healthcare they want.
